New Bank to Handle CR Carbon Credit Trading

Costa Rica Carbon Credit News (Reuters Point Carbon) – Costa Rica has created a new financial institution to handle the expected trading of carbon credits among companies and public institutions that have joined the country’s aim to reach zero carbon emissions.

The initiative, called BANCO2, will assist dealings with Costa Rica’s compensation units, known as UCCs, as well as with U.N.-issued carbon offsets and some types of voluntary markets credits.

“The bank will be a tool to help the country meet its target to become carbon neutral, but could also attract other investors,” said Rene Castro, Costa Rica’s environment and energy minister, in an audio message distributed by the government on Tuesday.

BANCO2 could also support local projects to reduce greenhouse gas emissions.

“If a company, for example, wants to switch its energy source for a cleaner one, we could support it. If a family wants to buy solar panels to reduce its energy consumption, we could support it,” said Castro.

Costa Rica has a voluntary target to reach carbon neutrality by 2021 and the government is requesting the private sector to join that goal.

Some companies have answered positively and will take part in a local carbon market that could be kicked off by the new bank.

According to the ministry, the government’s forestry company, Fonafifo, has already made available through BANCO2 a volume of 1.2 million carbon credits that it intends to sell for $5 each.

Fonafifo manages a successful forestry program responsible for increasing the country’s forest cover from around 20 percent of the total area in the 1980s to about 50 percent currently.

The local unit of tire-maker Bridgestone is negotiating through BANCO2 to buy UCCs from Coopesantos, a local renewable energy company, according to sources.

Costa Rica wants the new bank to finance programs to mitigate emissions using proceeds from sales of carbon credits that would be donated to the institution.

At least one company, the transport operator Reyna del Campo, is willing to pass on to the new bank its rights over UCCs that it will generate on a project to renew part of its buses with more efficient vehicles.

The government said it will give more information about the new bank during the next round of global climate talks, in Poland, next month.